The Union Corporate Affairs Ministry has initiated action on the findings of the Income Tax Interim Settlement Board (ITISB) that the Kochi-based Cochin Minerals and Rutile Ltd (CMRL) made illegal payments to Kerala Chief Minister Pinarayi Vijayan’s daughter and various political leaders.

The Ministry has issued a show-cause notice to the Cochin Minerals and Rutile Ltd (CMRL) and Kerala State Industrial Development Corporation (KSIDC) over the payments.

Notices have been issued before handing over the case to the Serious Fraud Investigation Office (SFIO). The Ministry has asked the CMRL and KSIDC to respond immediately, if there are any reasons why the SFIO should not start a probe into the case. The KSIDC has also been served notice as it owns 13.4% stake in CMRL.

The Income Tax Interim Settlement Board (ITISB) had found that CMRL disbursed Rs 135 crore to politicians and others after 2016. It has also found that a total of Rs 1.72 crore was received by Veena Vijayan and her company Exalogic during 2017-20 from a mining company, the CMRL, without providing any service to it.

The Corporate Affairs Ministry’s move came after CMRL shareholder Shone George approached the Kerala High Court seeking an order for a probe by the Serious Fraud Investigation Office (SFIO) on the illegal payments, based on the findings of the ITISB. The 19 charges in Shone’s petition filed in the court have also been attached to the show-cause notice, it is learnt.

Shawn has raised the following key questions in his petition filed before the high court:

1. Does the Rs 135 crore passed on by the CMRL to the leaders come under the Prevention of Corruption Act?
2. Why was the money not transferred under Section 80GGB of under the Prevention of Corruption Act?
3. Why was the political leader given money directly?
4. How did the CMRL, which reported a loss of 772.44 lakh as of March 31, 2016, register a profit after tax of Rs 7,336.82 lakh on March 31, 2023?
5. Despite the Union government banning mining by the private sector in 2019 March, how did the CMRL manage to procure so much Ilmenite?

In this connection, the Kerala High Court on 8 December suo moto issued notices to Chief Minister Pinarayi Vijayan, his daughter T Veena, and UDF leaders, including Ramesh Chennithala, P K Kunhalikutty, and V K Ibrahim Kunju, along with CMRL and others, on a petition challenging an order of the Muvattupuzha Vigilance Special Court dismissed a plea seeking for a vigilance investigation into the alleged illegal financial transactions between CMRL and the political leaders.

A single bench of Justice K Babu ordered impleading of the political leaders and issued them notice when the petition originally filed by late social activist Gireesh Babu of Kalamassery came up for hearing.

The court observed that if the notice is not issued to parties who are arrayed as accused, then it would go against the recent decision of the Supreme Court.